Wisdom From The Heart

I just finished reading Wisdom From The Heart, a short form biography written about Om Gupta, founder of Ashiana Housing Limited (see book here). The book traces Mr. Gupta’s start in the housing construction business until his death in 2013. There are many lessons to be learned from the way he conducted his life and the culture he set forth at Ashiana.

For context, Ashiana Housing is a homebuilder which develops housing projects in up and coming tier II Indian cities. It is widely respected for its customer service, on time deliveries, extreme capital prudence (no net debt), world class rates of return on development (30%-125%), low employee turnover, and business ethics.

Below are some principles Om Gupta followed in leading his life and building his company. Dale Carnegie would be proud.

Always smile

Don’t sweat the small stuff (money, being cheated, temporary disputes)

Be tidy and organized

Collect facts, verify information is accurate, and be decisive

Don’t be in awe of extremely wealthy, successful individuals; show tremendous respect for those less fortunate

Listen with the intent of understanding the other person; show genuine interest in others

Inspire others through magnanimity, trust, and confidence

Delegation is the art of clear instruction, tolerating mistakes, and trust

Pay your employees, suppliers, and creditors on time, no exceptions

Live / operate within your means; never extend yourself with excessive leverage

The only way to benefit from other human beings is to give abundantly

Always do what’s fair or even what’s more than fair; the returns will come down the line

Always focus on what’s going well; block out the small disturbances in your life

Don’t be poisoned by greed and growth; build something the right way which will live beyond you

A homebuilding operation is mostly a capital allocation operation. The best operators purchase land when prices are favorable and sit still when there’s excessive optimism. In addition, the best homebuilders are able to fund projects in advance through customers’ capital as opposed to shareholder equity. Ashiana’s model is very similar to NVR in this regard. The company has also added significant value by providing an incredible customer experience (leading to repeat purchases and referrals), supporting local communities, and empowering employees. In a highly competitive industry, it has managed to thrive by sticking to the values outlined by its founder, Mr. Om Gupta.

Ashiana is a name which is worth tracking. I’m doing more work to see whether valuation makes sense.